Subject: USA/Africa Dialogue, No. 1061: Botswana's Weekly Report
Date: August 31, 2005 4:15:41 AM CDT
To: Recipient List Suppressed:;

Republic of Botswana (27/8/05)

TAUTONA TIMES no 30 of 2005
The Weekly Electronic Press Circular of the Office of the President

"We agreed that some of our immediate challenges should be the
improvement of communications infrastructure such as roads and
telecommunications. In this regard, it is important that we construct a
bridge across the Zambezi River at Kazungula as a matter of urgency.
The Kazungula Bridge would be an important artery and link in the
infrastructure necessary for intensified intra-SADC trade and the rest
of Africa." - H.E. President Mogae [D 1]


A. WITFOR 2005 comes to Gaborone
B. Press Schedule
C. The week that was - Total Tuesday
D. Statements by:

1) H.E. the President accepting the letter of credence from the H.E. the
High Commissioner of the Republic of Zambia, Mr. Reuben Mwamutenta
Musakabantu, and accompanying message from the High Commissioner

2) The Hon. Minister of Presidential Affairs and Public Administration
Opening a Seminar on Internal Displacement in the SADC Region (24/8/05)

3) Mr. Nicky Oppenheimer, Chairman of De Beers, Opening the Botswana
International Trade Fair (23/8/05)

E. Press Office Forwarding:

1) Response to Mmegi newspaper article, enclosing a copy of the 9th of
August 2005 letter by the Permanent Secretary to the President to BFTU
Petitioners (23/8/05).

2) Additional notes and forwarding.

A. The World Information Technology Forum (WITFOR) comes to Gaborone

This the coming week the 2005 World Information Technology Forum
(WITFOR) will be convened in Gaborone. The event is expected to attract
some 900 or more delegates from over 70 countries.

At the core of WITFOR 2005's aims and objectives is a recognition of the
urgent need to work towards a more equitable and inclusive Global
Information Society.

Earlier this week the Forum's organising secretariat confirmed that they
had raised some 16.5 million pula in sponsorship for the Forum, mostly
from private donors. The following letter for the event was issued by
H.E. the President, as the Honorary Chairperson:

"Dear prospective World IT Forum sponsors and delegates,

"Botswana is extremely proud and honoured to host the second World
Information Technology Forum (WITFOR) in partnership with the
International Federation for Information Processing (IFIP), and under
the auspices of UNESCO, in August this year.

"We look forward to welcoming you to our beautiful country, and to this
most important conference. The event, also sponsored by the European
Union (EU), is hugely significant for Botswana and the rest of the
developing world as it will identify concrete actions to accelerate
development and reduce the digital divide. It will result in tangible
projects that will lead to real benefits for our people and those of

"Botswana has made huge strides in using information and communications
technology (ICT) in our development agenda. Indeed, our country is a
good example of a developing country making significant efforts to
prepare for a meaningful role in the knowledge economy.

"We have a number of ongoing local and international ICT projects, all
our secondary school pupils have good access to computers, and we have
recently launched a national ICT policy.

"However, we still have a long way to go. Countries like Botswana need
to exploit ICT to the full, in areas as diverse as health, tourism and
social services.

"We recognise that investment in world class ICT infrastructure is not a
luxury, but a development Imperative. It is incumbent upon ourselves,
the developing nations, to open up to the opportunities of becoming part
of the information society. I believe that these efforts could be
enhanced through partnerships with other nations.

"This conference will enable us to work together to find new, creative
ways to ensure that the spread of ICT promotes win-win partnerships on a
global scale.

"We hope that you will contribute to the success of this conference,
while enjoying the sunshine and hospitality of Botswana."

For more online details about all aspects of WITFOR 2005, including
press materials, one can visit the Forum's website @:

- Dr. Jeff Ramsay, Press Secretary to the President (27/8/05)

Contacts: Office Telephone: (267) 3975154 & Facsimile: (267) 3902795.
Cell: (267) 71318598. E-mail:

B. Press Schedule:

As always the events listed below, which represent only those parts of
H.E. the President's schedule open in whole or part to press coverage,
are subject to change. When possible and necessary, updates will be
forwarded. Members of the Press are also encouraged to contact the
sponsors of the various events listed below for further programme
details and possible updates.

Monday (29/8/05): In the afternoon, at 16:00, H.E. the President will
receive the Ombudsman at the Office of the President.

Wednesday (31/8/05): In the morning, from 8:00 hours, H.E. the President
will Open the 2005 World Information Technology Forum (WITFOR), at the
GICC. In the evening, in his capacity as the Honorary WITFOR
Chairperson, he will also host a Banquet at the Phakalane Golf Estate.
Formal statements are anticipated at both events.

Monday (5/9/05): In the afternoon H.E. the President is expected to
receive farewell calls from the High Commissioners of Kenya, at 15:00,
and the United Kingdom, at 16:00, at the Office of the President.

Wednesday (7/9/05): In the afternoon, at 15:00. H.E. the President is
expected to receive the Hon. Dr. Sorajak Kasemsuvan, who will be
visiting as a Special Envoy of the Prime Minister of the Kingdom of

Friday (9/9/05): During the day H.E. the President is expected to go to
preside over the Botswana Defence Force Recruit Intake 56 Passout Parade
at Pandamatenga Training Camp.

Saturday (10/9/05): During the day H.E. the President is expected to
travel to Mababe to take part in the handover of a Youth Recreation
Centre [further details to follow].

Sunday (11/9/05): In the afternoon, at 16:00, H.E. the President is
scheduled to depart from SSKI Airport for New York, where he will take
part in the United Nations High Level Plenary Meetings of the 60th
General Assembly, as well as address the Assembly. He is also, among
other things, expected to join the former US President Bill Clinton in
the launching of the Clinton Global Initiative, to take part in a
Millennium Dialogue Programme among African Leaders, and visit the New
York Stock Exchange of a special event. Further details and
confirmations shall be communicated.

Tuesday (20/9/05): H.E. the President is currently expected to return to
Botswana in the morning at 10:00.

Thursday (22/9/05): During the day, from 11:00 am, H.E. the President
will visit the Teemane Manufacturing Factory in Serowe.

Monday (26/9/05): In the morning, at 9:00, H.E. the President is
scheduled to give an exclusive interview to Mr. Pavel Myltsev, Regional
Chief of ITAR-TASS Russian Information Agency at the Office of the

Tuesday (27/9/05): An event anticipated for the afternoon, confirmation
and details to follow.

Wednesday (28/9/05): In the afternoon, from 14:00, H.E. the President
will attend and give the Keynote Address at the University of
Botswana/Friedrich Ebert Foundation Symposium on 40 Years of Democracy
in Botswana, to be held at the GICC.

Thursday (29/9/05): It is anticipated that H.E. the President will take
part in Independence Eve activities, details to follow.

Friday (30/9/05): Botswana Day - Morning, Afternoon and Evening

C. OP Press Highlights - Total Tuesday:

This week's Press highlights involving H.E. the President where all
confined to Tuesday (23/8/05). In the morning, he attended the Official
Opening of this year's Botswana International Trade Fair at the
Fairgrounds, whose keynote speaker was by the DeBeers Chairman Mr. Nicky
Oppenheimer [D 3]. In the afternoon, he received the credentials of the
incoming High Commissioner of the Republic of Zambia, at State House [D
1a, b].

Also on Tuesday morning a response with respect to the front page
article appearing in Mmegi newspaper of the same day was issued along
with a copy of the Office of the President's response to an earlier
petition signed by a number of Trade Union leaders [E 1].

A meeting of the National AIDS Council, which had been originally
scheduled for last Friday, was postponed to a future date to still be

On Wednesday the Hon. Minister of Presidential Affairs and Public
Administration, Mr. Phandu Skelemani, opened a Seminar on Internal
Displacement in the SADC Region sponsored by UNHCR [D 2].



High Commissioner Mwamutenta Musakabantu,

1. I am delighted to accept the Letter of Credence by which my good
friend, Brother and Colleague His Excellency President Levy Patrick
Mwanawasa appoints you High Commissioner for Zambia in Botswana. I also
accept the Letter of Recall of your predecessor.

2. Your appointment to this position, which is vital to the
management of relations between Botswana and Zambia, so soon after the
departure of your predecessor, demonstrates both the continuity and
cordiality of our relations. Our bilateral relations are happily founded
on a solid foundation of mutual respect, friendship and solidarity. The
exchange of Envoys between Zambia and Botswana is therefore always a
significant moment symbolizing the unending commitment of the leadership
of the two countries to further intensify and deepen mutually beneficial

3. You are beginning your tour of duty in the year in which we
celebrate the Silver Jubilee of our regional organization, the Southern
African Development Community (SADC). We recall with deep appreciation
that SADC was born in Lusaka on 1st April 1980 when the Heads of State
and Government of the Frontline States adopted the Declaration on
Southern Africa: Toward Economic Liberation. This was the culmination
of many years of struggle and sacrifices which saw the liberation of
Zimbabwe which followed that of Angola and Mozambique. Zambia had been
at the cutting edge of these struggles for freedom, democracy and human

4. I have no doubt that when the Hashim Mbita Project is completed,
Zambia's huge contribution to the liberation of Africa, the sacrifices
made at the height of that struggle and the selfless disposition which
still defines the Zambian nation would correctly and rightfully occupy
the pride of place in the annals of Africa's quest for liberty, equality
and democracy.

5. We in Botswana always remember the contribution which Zambia
made to the enormous challenge of laying the foundation for
socio-economic development in our country. Zambia opened the doors of
learning to many young Batswana at a time when there were no educational
and training institutions in this country. Some of our medical doctors
and economists were trained in Zambia. When Botswana found itself
compelled to establish an army to defend its population from the
frequent attacks by the illegal and racist minority regime of Ian
Douglas Smith, we turned to Zambia for the first intake of the Botswana
Defence Force Officer Cadets.

6. High Commissioner, Musakabantu, you are also coming to Botswana
in the year in which President Mwanawasa had paid a State Visit to
Botswana. In March this year, we were delighted to welcome the President
and to have the opportunity to review the state of our bilateral
co-operation. Our co-operation covers a wide range of areas such as
agriculture, education, culture, health, tourism, transport, wildlife
and security. A firm foundation has already been established and I
believe your immediate task is to ensure effective implementation and
follow-up of agreed commitments.

7. One of the chief corner-stones of relations between Botswana and
Zambia is the good progress we have made in building people to people
relations. Greater mutual understanding between our people has been
both an inspiration and engine that drive the development and growth of
what our nations can achieve by working together. Zambians are working
alongside Batswana in the public service and in the private sector in
the spirit of partnership and mutual solidarity. Together they are
contributing to building a better future for all. As a matter of fact,
relations between us have been more than exemplary and we must continue
to nurture this in the years ahead. As a new representative of Zambia
in Botswana, I would like you to know that my Government appreciates the
hard-work and professionalism of the many Zambians working in Botswana.
It is important that they should know that their services are welcome
and appreciated.

8. In conclusion, I wish to reiterate what we agreed on the
occasion of President Mwanawasa's State Visit to Botswana in March this
year. We agreed that some of our immediate challenges should be the
improvement of communications infrastructure such as roads and
telecommunications. In this regard, it is important that we construct a
bridge across the Zambezi River at Kazungula as a matter of urgency.
The Kazungula Bridge would be an important artery and link in the
infrastructure necessary for intensified intra-SADC trade and the rest
of Africa.

9. Lastly, I once again welcome you to this your second home. My
Government and I will ensure that our doors remain open to you at all
times to facilitate the management of relations between our countries
for the common good.


1. Your Excellency, I am greatly honoured for this opportunity to
present my Letters of Credence. I am the bearer of fraternal greetings
from your brother and colleague, His Excellency Mr. Levy Patrick
Mwanawasa, SC and the people of Zambia to Your Excellency and the people
of Botswana. May I also express my gratitude to Your Excellency for
allowing me to present my credentials in record time considering your
very busy schedule.

2. Your Excellency, you have just successfully hosted the SADC Summit. I
wish to congratulate Your Excellency and the people of this wonderful
country on your election as Chairperson of this great regional grouping.
SADC is a forum at which Zambia and Botswana can do much for our people,
especially economically.

3. Your Excellency, Zambia and Botswana have enjoyed excellent relations
which date back to pre-independence times and were formalised when
Zambia became the first African country to open up a resident diplomatic
mission in the Republic of Botswana in the 60s. Indeed our bonds of
friendship, which are based on our two countries' shared common ideals
and aspirations, have grown from strength to strength over the years.

4. The two countries have been allies in the quest for peace and
stability not only in the sub-region, as evidenced by the support
rendered during the liberation of southern Africa, but in the world at
large at international level, such as in the United Nations and
Non-Aligned Movement.

5. Your Excellency, during my tour of duty, I will continue to work
together with the Government of Botswana to build a strong foundation of
good bilateral relations for the mutual benefit of our two countries and

6. In this regard, Zambia will seek to continue to enhance cooperation
through the framework of the already established Zambia/Botswana Joint
Permanent Commission of Cooperation and Joint Permanent Commission of
Defence and Security. I also look forward to working with the Government
of Botswana to realise the dream of having a bridge at Kazangula, which
will facilitate enhanced movement of goods and people across our border.

7. Your Excellency, we in Zambia have keenly followed the economic and
political path that the Republic of Botswana has taken since
independence. We are impressed by Botswana's rapid growth, which has
resulted in the country becoming a middle income country, thereby
significantly raising the living standards of the people.

8. Indeed, Botswana's economic success has given us hope that with
prudent management of the economy it is possible to reach greater
heights economically.

9. Your Excellency, I wish to conclude by reaffirming my commitment to
the strengthening of friendly relations between our two countries. I
thank you!


Director of Ceremonies,
Professor Walter Kalin, Representative of the United Nations
Secretary-General on the Human Rights of Internally Displaced Persons
Special Representatives of the United Nations Secretary-General here
present, Your Excellencies Members of the Diplomatic Corps, Your
Excellencies Heads of International and Regional Organizations,
Distinguished Participants Ladies and Gentlemen,

1. On behalf of the Government and the people of Botswana and
indeed on my own behalf, I am pleased to extend to you all a warm
welcome to Botswana and the City of Gaborone in particular. It is our
desire that your Seminar on Internal Displacement in the Southern
African Development Community (SADC) Region proceeds well.

2. The Government of Botswana is honoured to host this meeting of
governmental officials as well as representatives of International
Organizations, Donors, Non-Governmental Organizations and Academic
Institutions. We are pleased with our collaboration with the United
Nations High Commissioner for Refugees and the Representative of the
United Nations Secretary-General on Internally Displaced Persons to have
this forum, the first of its kind, focusing on Internal Displacement in
Southern Africa.

3. Distinguished Participants, you will be aware that internal
displacement of persons is a problem that affects Africa deeply.
Currently, more than half of the world's 25 million persons who are
internally displaced by conflicts and violence are found in Africa. In
the SADC region alone, some 2.9 million persons are displaced. These
are the people who have been forced to run away from their homes and who
consequently have become extremely vulnerable to impoverishment,
malnutrition, armed attacks, sexual abuse and sexually transmitted
diseases including HIV/AIDS. Amongst the displaced persons, are women
and children who deserve special attention as they typically make up the
majority and are more vulnerable to all the atrocities you can imagine.
They form the biggest brutalised of all displaced persons, at least in
our region.

4. Master of Ceremonies, the responsibility for assisting and
protecting the internally displaced persons rests squarely on the
shoulders of our national Governments. Yes, International Agencies and
Donors have a role to play in supplementing the capacity of our
Governments to protect and promote the Rights of the internally
displaced persons, but ultimately as sovereign States it is our
responsibility to look at the root cause of this phenomenon and resolve
to prevent it and respond to it in a swift, effective, and principled

5. In carrying out this responsibility, it is pleasing to note that
the Guiding Principles on Internal Displacement of Persons provide us
with a very useful reference point. The Government of Botswana is proud
to have co-sponsored many of the United Nations General Assembly
Resolutions as well as its Commissions on Human Rights that recognize
the Guiding Principles as a valuable tool and global standard for use in
addressing the issue of internal displacement of persons. I am glad
that many of our fellow SADC Member States have subscribed to such
resolutions most of which were adopted by consensus. But I would be
pleased to learn and see States put in practice these principles.

6. Distinguished Participants, Ladies and Gentlemen, it is very
importance for us to acknowledge that taking responsibility for
internally displaced persons should not only depend on our respective
national policies, but on our collective well-considered and coordinated
regional approach to the challenge. After all, the consequences of
internal displacement are felt not only at the national level, but
across the entire region.

7. This Seminar therefore provides us with a valuable forum to
identify best practices in responding to internal displacement of
persons across the SADC region, and to reflect on how these strategies
may apply in each of our countries. You should also have the
opportunity to discuss further, the development of regional initiatives
such as Joint Early Warning Systems as well as Disaster Prevention and
Mitigation Systems that may lessen the impact and duration of the
internal displacement crises. With the wide variety of participants we
have in this Seminar, we should be able to benefit from the diversity of
experiences and insights we bring. Your analysis of the problem and the
identification of the best solutions should equally reflect this optimal
mixture of participants.

8. Distinguished Participants, to this end, it is pleasing to note
that arrangements are afoot throughout our Continent, at the Regional as
well as Sub-Regional levels, to give greater prominence to the issue of
internal displacement of persons and to ensure that our Governments'
response to it is comprehensive and very effective. Over the next two
and half days, you will have an opportunity to consider how regional as
well as national responses within the SADC region can be enhanced to
prevent further forced migration; lessen the suffering of the displaced
persons; and bring durable solutions within reach of the millions of the
displaced persons. Let us remember that when all these people are on
the run or in Refugee Camps, they do not lead normal lives and the
children cannot receive the education without which they can never
properly rejoin their societies as useful citizens with equal
opportunity and ability.

9. Director of Ceremonies, Distinguished Participants, in
concluding my remarks I would once more like to reiterate our pleasure
in having you in Gaborone and that the people and Government of Botswana
fully subscribe to the initiatives of the world bodies to ease the
plight of the displaced persons. I wish you fruitful deliberations. Let
us seize the opportunity of this seminar to the fullest extent. Thank
you. PULA!

D 3) "Building on Diamond Botswana's Holy Development Trilogy" - Speech
by Nicky Oppenheimer, Chairman of De Beers, Opening the Botswana
International Trade Fair (23/8/05)

Mr Chairman, Ladies and Gentlemen,

With a growth rate averaging slightly over 7% for most of the last 30
years, Botswana's economic performance has been one of the most
impressive, not only in Africa, but in the developing world more
generally. What was once a very poor country is now one of the very few
in Africa classified as 'middle-income'. It is a record all-the-more
remarkable given Botswana's starting point at independence in 1966.

Botswana's 40-year development record illustrates the value of cementing
public-private partnership, of the commitment to the protection of
investor rights, and also of the potential of resource endowments.
Nothing illustrates this better than the partnership between the
Government and De Beers in Debswana. But the Botswana reform elements go
beyond just the effective management of diamonds and include an
efficient, meritocratic bureaucracy, and the maintenance of both fiscal
discipline and political stability.

But Botswana's greatest success highlights a long-term vulnerability in
its economy which all would be reckless to ignore. Much of its growth
has been directly from diamond exploitation, a process which I am proud
to have been a part of. Today, diamond mining accounts for 35% of
Botswana's GDP and around 85% of exports and much of the rest of the
economy lives indirectly off of the diamond industry, Botswana's
dependence on diamonds is almost total.

The challenge to all Botswanans is how might Botswana move away from a
near-total dependence on diamonds while never endangering the goose that
is laying such diamond eggs? There can be no better time to explore this
question than at this International Trade Fair which illustrates all the
opportunities here in Botswana.

There is much to be learned from the example of a number of developing
countries that have successfully diversified their export portfolios,
including Dubai, Malaysia, and Mauritius. But in doing so, it is
necessary always to be cognizant of and sensitive to Botswana's
particular geographic, social, and economic conditions.

So what can be learnt from other's experience?

In East Asia, home to the 'tigers' and an ever-expanding pack of 'cubs',
economic growth consistently followed a route of, first, industrial and,
later, services sector growth. Related to this was the imperative of
maintaining a competitive exchange rate, sometimes fixed and sometimes
floating depending on country circumstances.

Beyond general principles, East Asia's economies really took off when
they applied their people productivity advantages to a distributed
manufacturing process, especially in consumer electronics. For example,
an Asian electronic consumer product contains components from Taiwan,
Singapore, South Korea, Malaysia, etc. and this provided the impetus for
the expansion of intra-regional trade as well. While countries such as
South Korea may have been protectionist, they were also focused on
international markets. While foreign aid was important, it was utilised
with an emphasis on building intellectual capital.

The net result? In the 1970s, 11% of the world's poor were on the
African continent and 76% in Asia. By 2000, Africa had two-thirds of the
poor, and Asia just 15%.

Malaysia, for example, is a relevant case study of economic
restructuring, having moved from dependence on rubber and tin in the
1950s to a diversified economy with a strong manufacturing component,
especially electronics and, earlier, textiles, palm oil, rubber, oil and
natural gas, as well as a growing services sector. Malaysia is now one
of the world's largest producers of electronics and electrical products.
It is the fifth-largest exporter of semi-conductors in the world. But it
has not all been smooth sailing and many Malaysians themselves are
questioning some of the costs of the policy of bumiputera or Malay
affirmative action.

Elsewhere, Dubai has successfully moved from an overwhelming dependency
on oil to a high-tech economy centred on its status as a transport and
communications hub. To a great extent this was dependent on geography -
in the form of Dubai's strategic location at the crossroads between east
and west - and imported skills. It is unclear to what extent this
experience can be translated to Botswana, located towards the southern
tip of Africa.

Closer to home, Mauritius successfully diversified away from agriculture
to an increasing focus on services - notably tourism and banking - and
manufacturing. Some 9,000 offshore entities have been attracted to
Mauritius, and the banking sector alone has bought in US$1 billion of

It is fair questions to ask how appropriate such models are when looking
for ways to reinforce Botswana's success and take its economic growth
and development to another, even higher level.

What we do know about growth is that business has a key role to play. As
Tony Blair has recently commented, "The private sector is the engine for
growth in Africa. Growth and development can only happen when
governments and business work together." Botswana's record illustrates
his point.

Here the role of 'growth coalitions', involving government, business
(notably domestic, but also foreign) and civil society, is important.
This enables government remain constantly responsive to new ideas, and
prepared to adapt policy to suit. A key element is to get the various
partners to do what they are good at and to avoid what they are bad at,
in this way it is possible to have an equation of 2+2 and have the
answer to be more than four.

Of course, there are 'no universal rules' about what makes countries
grow given differences in history, natural resource endowments and
geography. But there is, too, no mystery to economic growth. It rests on
a combination of good public institutions - adapted and developed for
local conditions - and systems of government and governance, including
property rights protection and a functioning legal system, which manage
the economy, protect the rights of the individual and investors, and
enable social and political instability. It depends also on the
political elite's commitment to deliver public goods. It demands having
not just access to technology, but technical efficiency and proficiency.

Again, we are fortunate that Botswana has such attributes in large
measure, as the success of the past 40-years of development indicates.

So how might we reinforce Botswana's successes?

Reinforcing a Success Story

Today Botswana is in a different league to most African states. From
this vantage it is easy to forget that it was, at independence in
September 1966, something of a developmental backwater.

Possessing just ten kilometres of tarmac road, Botswana was one of the
least developed and poorest nations in the world, with a per capita
income little over US$70. The majority of the population was dependent
on subsistence agriculture.

At independence there were fewer than 30,000 people in salaried
employment and little over the same number of migrant workers, mostly
employed in South African mines whose remittances alone totalled around
one-fifth of total exports. There were no more than 50 university
graduates in a country where literacy was low, and there was very
limited access to health, sanitation, water, telephone, electricity,
public transportation and other services. Botswana relied, then, on
British foreign aid for its capital budget and a major portion of the
recurrent budget.

How things have changed - the first prerequisite was that Botswana was
blessed with such large diamond deposits but that by itself is not
enough as has been demonstrated so sadly elsewhere in Africa. Botswana
also has the 'holy development trilogy' - good democratic governance -
prescient leadership and sound policy.

Given that development and democracy have so often gone hand-in-hand, it
is no surprise that Botswana is Africa's longest continuous multi-party

Moreover, Botswana has traditionally had among the best governance
records in the developing world. A recent World Bank rating placed the
quality of governance in Botswana as slightly above South Korea and just
below Italy. The government has managed the country's resources
prudently and has kept its recurrent expenditure within its revenue,
allowing for investment in human and physical capital. The government's
revenue from diamonds, as well as profits from large foreign exchange
reserves of the Bank of Botswana, has largely cushioned Botswana from
the recessions that have buffeted most countries in the region. Two
major investment services (Standard & Poors, and Moodys) today rank
Botswana as the best credit risk in Africa.

The Non-Diamond Economy

But - and this is the big BUT - Botswana's attempts hitherto to
diversify away from diamonds have been adversely affected by a number of
factors. One is the relative high value of the Pula [a result of
Botswana good record elsewhere]. As a result, Botswana is a very high
cost environment that - outside of diamonds - finds it hard to compete
even in the immediate neighbourhood, much less internationally.

Put differently, Botswana has approximately the same income as South
Africa. Yet, Botswana's southern neighbour has a little more than twenty
times the population and is not land-locked. As a result, many options
that might be available to other developing countries are not viable for
Botswana. Many industries that Botswana might try to lure also find
South Africa's larger domestic market, more sophisticated private
sector, and better geography a more attractive environment. Finally, the
South African government has not been shy in trying to poach those
industries that have started to develop in Botswana.

Partially as a result, manufacturing, construction, and agriculture each
contribute between 3-6% of GDP, and there has been limited growth in
financial and government services in recent years. The government's
attempts to locate Botswana as a regional financial hub through the
International Financial Services Centre (IFSC) have, however, only met
with limited success partly, as with other areas of attempted
diversification, due to the competition offered by South Africa.

The government has long recognised that the country's high dependence on
diamonds is a long-term risk, especially as diamonds will not be
produced forever in Botswana, even though current reserves will last for
generations yet. However, the attempts to encourage investment and
diversification through incentives have been at best only partially

The first need in developing appropriate economic reform and
diversification strategies is in recognising the strengths and
weaknesses, and successes and failures of past government policy. It is
a credit to the Botswana government that it has never been reluctant to
scrap or change programmes when they have not delivered; and it has
always closely monitored the progress of such schemes. Such is the
importance of an open and critical society, in which policies can be
discussed before implementation, and amended afterwards if they don't
seem to be working.

There may be more encouraging news from elsewhere however.

The international experience of economic growth shows that us that
relatively minor reforms - such as India's relaxation of industrial
regulations in the 1980s and tax regime rationalisation - can have a
large impact. The logic demands that such reforms are, however, ongoing
and often sequential through, for example, the whole spectrum of
privatisation and the 'corporatisation' of public enterprises as well as
the labour and other laws that go with this.

Importantly, such reforms do have to form part of an overall strategy
for industrialisation and diversification. Critics have argued that the
absence of such a strategic approach is, for example, South Africa's
greatest economic weakness. Also, attempts to improve skills and
productivity can only be partly successful without matching them to
strategic, long-term industrial needs. We need, in this regard,
throughout Africa more artisans, technicians and engineers and fewer
social scientists. To do so, we need to place the value of a technical
education - and of technical colleges - on at least the same pedestal as
degrees and universities.

We do know that single, isolated policy initiatives are not enough by
themselves. For example, greater trade openness is alone insufficient
for economic growth. Neither is foreign direct investment by itself
enough, too, for development. It is the extent of overall integration
with the global economy which is important and the key indicator of
growth potential.

For example, research shows that growth can occur when accompanied by
direct investment of a type that integrates economies into a global
supply network of parent multinationals. Paradoxically, foreign
investment oriented toward those protected domestic markets and hampered
by joint venture and domestic content requirements including
technology-sharing is much less beneficial. Such provisions can
interrupt intra-firm trade, and lead instead to inefficient production
processes, outdated technology, and waste of host country resources.
Similarly, tax incentives for promoting Foreign Direct Investment are
often better spent on improving local infrastructure, and education and
training that benefits foreign and local firms alike. Of course, more
openness leads generally to better institutions.

We also know that growth will not come about by protecting sacred
political and policy cows; whether this be a commitment to a high local
currency value or a reluctance to encourage the migration of necessary
skills - at least temporarily - from outside.

Ladies and gentlemen, Since I am aware of George Burns' sage advice that
"The secret of a good sermon is to have a good beginning and a good
ending; and to have the two as close together as possible", let me end
with a few thoughts as well as a few questions for us to ponder.

Placing Botswana on a fresh growth path and trajectory poses a set of
questions, including but beyond the state sector. For example: What
should be the role for state-led processes which place policy emphasis
on diversification by encouraging growth in the service sector and
movement up the value-added manufacturing chain? What is the role for
the right regulatory and monetary environment to encourage business?
What of labour policy? And what of financial sector management? And
finally, what might be the role for small and medium-enterprises in this
diversification process?

I would especially point to a need for Botswana to fit into the niches
created by the rise of the Asian economies, notably China, which have at
least partly closed off certain industrialization and diversification
options (such as light manufacturing) to states elsewhere, but whose
economic rise may instead open up others, ranging from tourism through
minerals to commercial agriculture. More global wealth such as is being
stimulated by Asia can only be good news, but it calls for ingenuity in
how to take advantage of it.

This policy and development process will inevitably not be easy, but I
am always reminded in dealing with such challenges of Churchill's maxim
that "Difficulties mastered are opportunities won".

For the means of achieving economic growth and strategies of economic
diversification is not only important to analysts, pundits,
business-people and academics. It is important for us to consider all
options in working together to map a future path for Botswana beyond but
including diamonds. I hope to be part of this process for Botswana is of
great importance to me and to De Beers. We will certainly be ready to be
part of the process of planning for the secure future of the generations
to come.

This International Trade Fair illustrates many different aspects of life
in Botswana and I am sure as we think about new opportunities for the
future so the importance and relevance of the Fair will ever increase.

It gives me great pleasure to officially declare The Fair open.

E. OP Press Office Forwarding:

E 1) 23/8/05: Response to Mmegi article entitled "Mogae's 'mysterious'
letter under investigation"

This Office notes with considerable concern the lead story in this
morning's Mmegi newspaper (23/8/05) "Mogae's 'mysterious' letter under
investigation". Having now looked into the matter it would sadly appear
to us that this so-called mystery has been concocted by individuals
whose misleading purpose is a matter of speculation. The facts known to
us are as follows:

At 19:10 hours yesterday evening the Press Secretary to the President,
Dr. Jeff Ramsay, was contacted by cell phone by a Mmegi reporter who
enquired about the authenticity of an alleged response letter from the
Permanent Secretary to the President, Mr. Eric Molale to the Botswana
Federation of Trade Union (BFTU), which the reporter claimed was
unsigned and without a letterhead. In a subsequent call the Press
Secretary confirmed that such a letter should indeed have had both a
letter head and signature. In that context the Press Secretary was not
in a position at the said late hour to confirm the authenticity of the
letter, but promised to look into the matter in the morning.

Further to the above it can be confirmed that the Permanent Secretary to
the President, on behalf of H.E. the President did write to the Botswana
Petitioners on the 9th of August 2005 responding formally and fully to
the various points raised in their petition to H.E. the President dated
the 4th June 2005, but otherwise first known to this Office from news

On the 16th of August 2005, at about 17:00 (albeit dated 8/8/05), this
Office received a letter addressed to the Permanent Secretary to the
President and signed by the Assistant Secretary General of the BFTU, Mr.
Patrick Dafide Chengeta, stating that his Union planned to hold a
demonstration at the Office of the President on Saturday the 20th of
August 2005, in order to demand a response to their petition.

The following morning Mr. Chengeta was contacted by the Acting Permanent
Secretary for Political Affairs, Mr. Bergsman Sentle, who asked him if
the Union still planned to hold such a demonstration in light of the
fact that a response had been sent to them over a week ago.

At this point Mr. Chengeta is reported to have claimed that the BFTU had
not received any response. He further stated that he would need a copy
of the correspondence on the same day in order to consult with his
colleagues. In this context a copy of the letter, clearly marked "Copy"
was hand delivered to Mr. Chengeta.

In the light of the above this Office is surprised that there should
apparently have been confusion between members of the Union and Mmegi
newspaper on this issue yet another week later.

Given the fact that an alleged copy of the correspondence between this
Office and the Union has been shared to the press, and to avoid any
further mystery enclosed is a full and authentic copy of the Permanent
Secretary to the President's response of the 9th of August 2005.

This Office further notes that over the past several months it has, on a
number of occasions, had to correct misleading reports in the media all
connected to supposed approaches to this Office by individuals claiming
to be acting on behalf of the BFTU. This has become a matter of serious

Further to the above, we do appreciate the fact that the Mmegi newspaper
approached us to verify the authenticity of the alleged letter.


August 9, 2005

The Petitioners c/o Botswana Federation of Trade Unions
P.O. Box 440, GABORONE

Dear Sirs


After careful consideration to the issues raised by you, His Excellency
the President has directed me to respond as follows to your petition
dated the 4th June, 2005.

A. DEMANDS 1 - 3

You have demanded the unconditional reinstatement of workers and Union
leaders dismissed following unlawful industrial action at BCL and
Debswana mines, as well as the discontinuation of ongoing disciplinary
proceedings. However Government has put in place legislation providing
for internationally accepted governance procedures and processes for the
resolution of Industrial disputes. It would be disrespectful of the
rule of law to intervene in these processes, which should ultimately
lead to judicial decisions in all areas of conflict. His Excellency,
the President feels that the rule of law should be followed to a
meaningful and beneficial conclusion by the parties involved.

His Excellency did attempt, in the case of Debswana, at an early stage,
and on an informal basis, to bring the parties together and to narrow
the gap between them. Those efforts did not bear fruit and normal
dispute resolution should now take its course.


You demand the establishment of a Commission of Inquiry into the
breakdown of labour relations at BCL and Debswana. His Excellency does
not find this to be appropriate, since lawful dispute resolution
procedures are in place for those still aggrieved. His Excellency is
informed that in recent weeks labour relations in both Companies have
seen a significant improvement.


You demand the release and publication of the recent report commissioned
by Government to review Debswana's corporate governance. This is an
internal report whose contents are not for public consumption. The
report has actually led to the updating and further improvement of
governance procedures in Debswana and this will continue, as it is an
ongoing process.

In conclusion, H.E. believes and holds the expectation that the
management of BCL and Debswana on the one hand and the Unions on the
other will recognize the importance of a working partnership between
them. The interests of everybody, including the companies, their
stakeholders, management, the unions and the country require it. We
wish you success in all your efforts to resolve all the above matters.

Yours faithfully
[Signed] Eric M Molale

E 2) Additional notices and forwarding from 21-27/8/05:

* 24/8/05: Friday's National AIDS Council Meeting postponed.
* 26/8/05: "United States Helps Fund Coal -fired Power Plant in